Author: Joy Lou Source: Cycle Trading

Event: Cang.us in November Three important announcements were made in a row, including the acquisition of a 32Eh/s running cryptocurrency mining machine from Bitmain for US$256 million; plans to issue US$144 million in shares for the subsequent acquisition of a 18Eh/s running cryptocurrency mining machine; in November 393 Bitcoins were issued.

Comments:

1. Cangu obtained 32Eh/s in operation in the first phase The shutdown price of cryptocurrency mining machines is about US$70,000 per piece (including Bitmain hosting operating costs). The projects are mainly distributed in five countries including the United States, the Middle East and Africa. The mining machines mainly use Bitmain’s flagship S19 mining machine, which is still available. The depreciation period is approximately 4 years.

2. The US$144 million required for the second phase of 18Eh/s operating cryptocurrency mining machines will be obtained through targeted issuance, mainly formed by 9 natural persons The investment entity is expected to complete the event in March 2025, and the seller is Golden TechGen (GT).

3. Cangu also signed a supplementary agreement. As an option reward, if Cangu’s market value reaches a specific value for 30 consecutive trading days in the next 30 months, the company will A further share of US$97.1055 million will be issued and donated to the investment entities formed by the aforementioned nine natural persons.

4. Although the price of Bitcoin has risen sharply recently, the company came into contact with the project earlier, around the time when Bitcoin was US$60,000-70,000 per coin. We have reached an agreement with the seller of the target project, so the purchase price is basically a parity purchase.

5. After the completion of this acquisition, Cangu’s main business will transform from the car dealer business to the self-operated mining business. The company will then rely on these businesses to continue to expand outward to include computing power leasing, cloud hosting and other diversified business operations to further smooth out the significant fluctuations in the company's profits caused by Bitcoin price fluctuations.

Investment advice: After Cangu completes the acquisition of the remaining 18Eh/s projects in March 2025, the operating computing power will reach 50Eh/s, becoming the largest company listed in the United States so far. The largest mining company. Among North American mining companies currently, Marathon Digital (Mara.us) is self-operatedThe mining farm has a computing power of 46Eh/s, with a market value of US$7.9 billion, corresponding to US$170 million/Eh; Cleanspark (Clsk.us)’s self-operated mine is 32EH/s, with a market value of US$3.6 billion, corresponding to US$110 million/Eh. Considering that the company's shutdown price is relatively high, US$110 million/Eh is selected as the valuation basis, which corresponds to a market value of US$3.52 billion before the completion of the second batch of acquisitions in March and a market value of US$5.5 billion after the acquisition, compared with the company's current market value of only US$720 million. The market value is significantly undervalued, with room for growth of 3.9 times to 6.6 times.

This article was written on December 18, 2024. The real-time CANG price is US$6.